Online magazine Salon.com has become the latest victim of the internet sector shake-up after annnouncing cutbacks and lay-offs.

The company said it was cutting its budget by 20% and reducing its staff by 13 to about 127 employees.

Salon.com's chief executive Michael O'Donnell said the savings made from the cutbacks would buy the company some more time before returning to investors for additional cash.

The company now has $14m in the bank, allowing it to operate for more than a year.

"Our feeling was, we'd like to be around a year from now, so we thought we'd take these steps now, however difficult," Mr O'Donnell said.

"You need to make sure that you'll live another day," he said.

Less stories

However, he said the financial and staff cuts would led to a 25% reduction in the number of stories and other material on the site.

The news comes as other media companies have announced job cuts in recent days.

Broadcaster CBS has reduced its internet division staff by a quarter. Women's cable channel, Oxygen, said it was postponing two shows over the summer and reducing its workforce by about 12.

The recent collapse of online fashion retailer boo.com, the most high-profile internet business failure, highlighted fears about the viability of many internet companies.

Many companies are running out of cash, and unlikely to turn a profit for several years, the future for some does not look too bright.

Salon.com is yet another internet company struggling to make a profit.

It posted a net loss of $6.2m on revenues of $2.6m in the first quarter of this year.